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March 09, 2015

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Dunlap road was originally Olive road and remains Olive upon entering Glendale. I thought Dunlap was also a JP, I was his paper boy and close to him was a small dairy where you could get a glass of unpasteurized cool milk. My friends, and co workers, the Valdezes, in John Jacobs Farms owned and lived on a couple of acres at 2400 W Olive, now Dunlap. John Jacobs farms were north of Olive and started and went north from the Arizona Canal. The east boundary was 19th ave and the east boundary was what is now the Black Canyon Freeway.

Hatcher road was the Wabash. The Wabash trailer court located on 7th Street between Hatcher and Mountain view was home to folks with Tuberculosis when I moved to Sunnyslope in 1950. I had a doughnut route and the folks in the trailer court favored doughnut holes. The trailer court was torn down a few years ago.

Dr. Halls North Mountain Hospital tucked in a small canyon at about 10,000 N 2nd Street is gone. (he had two large monkeys at the hospital and when they got loose my training officer shot and killed one. Was a sad day but that cop later got fired for stealing on duty.

Today North Mountain Hospital also known as JC Lincoln (interesting family) today takes up a lot of acreage from Dunlap to Hatcher between Central and #rd Srteet. Gone is the old Sunnyslope Mission and the old Sunnyslope swimming pool

Some east west roads changed names when they crossed Grand Ave going west. Indian School became J - Camelback H
McDowell became Christy and so on. Many north south roads were named laterals for the ditch that ran beside them. Today's 27 th Ave. once had 4 names at the same time -27th Ave, Mission Drive,Black Csnyon Hwy. and lateral 14.
Grand Ave. is the outlier running southeast to northwest.

Side-note: new replies to wkg and Cal in the previous thread.

Great background, Rogue! Tough to find all this in one convenient place, much less in so nuanced a form.

Ramjet, you remember Dennys Gleason the Lateral enthusiast? And the car he hauled all his lateral signs around in to post all over Maricopa County.

P.S. A new reply to wkg (re the correlation between school spending and performance) has also been added to comments in the previous thread.

I heard that Cheery Lynn was named for developer Tom Wood's daughter.

Cal- North mountain hospital was personal favorite make out spot. "Hey, Sarah, want to go up to see the baboons?" Those were't the baboons that I had in mind, but I digress. We named one of them Roy, threw him a few treats, but he was a mean bastard. Gig from hell fer them monkeys.

Two more new replies to wkg re Arizona school funding and also district to charter conversions, added in the previous thread.

Dawgzy, u born in The Valley of Sun and Sand?
U go to School in the Slope?

An interesting and different take on economic inequality and economic segregation:


http://martinprosperity.org/content/insight-segregated-city/

Poor old Jack Swilling: easily one of the most colorful characters ever to ride into the old territory, let alone found (sort of) a major American city, and stupid Phoenicians totally ignore him.

I was looking at the old 1909 picture and the oversized rifle displayed in front of the gun store, I thought, “Some things don’t change”.
Then I notice the headline next to the picture in the side bar “Greenland Is Melting - The Big Picture”, and I thought, “And yet, some things change in big ways.”

http://m.youtube.com/watch?v=ivkouEj67mg

I think there should be a ban on city streets named after developers. It's just free shameless self promotion.

Cal,
I do remember Denny's signs. I believe that Central and Baseline was his zero - zero. I have heard that some of them still exist, but I haven't seen any. I believe that at one time McDowell was thought to be the longest continually named road in the US.

Great column on PHX history RC. I can live without a Swilling street as he was a former Confederate and when not looking for gold or digging up old canals, he and his buddies would ride up the Hassayampa River and murder the local Natives for sport. A Swilling street would be a great name for a string of bars tho. Mesa does not have a Jones street for the Mormon pioneer that brought the first settlers there.

Emil - I would have gone with Missing by the same.

Like the deserts miss the rain...

https://www.youtube.com/watch?v=9lcCKs3q5Fc

Jerry, Swilling was a Confederate, but he was a deserter, and became a Union scout. I've never seen anything about him slaughtering natives for sport, and it sounds completely out of character. I've read that he took some native and Mexican orphans into his household and raised them with kindness. He was a morphine addict, but he had some old injuries, and those often never healed in those times. The fact remains, though, that he was the real deal. I have an old newspaper clipping in my family papers in which a turn of the twentieth century judge from Casa Grande reminisces about encountering Swilling, and just...wow!

Gleason had an old Ford SW. There are still some of his markings on concrete Wier boxes in the SW part of the county.

Yea, Smaller population post on Front Pages.
Here comes Susan Calvin and the Robots.

Pat, I think you're right about the desertion part. I have a bio of Swilling around here (probably in storage) and that's where I read the story of the Native hunts. But I can believe people change too.

Cal- Dawgzy was born in the old St. Joe's hospital on 3rd St. I lived on Monte Vista 3 blks north of McDowell Rd. between 3rd and 7th Sts. I went to (gulp) Brophy, spent scant time on the Slope. Left town in '65, still have 3 sibs in Phoenix and numerous cousins there.
I had a long conversation a year or so go about it with a guy who moved to Portland to get away from his drug scene. He said that it became known as Sunnydope, and that it was where you went to score. I recall it as a nicely laid back place.
Did you live at the northern terminus of Central Ave?

Got to slope in January 1950. It snowed 2 weeks later
Thought my parents lied to me. Lived at 300 east Alice. Few months later moved to 9822 N 3rd St.
Paper and doughnut routes and caught and sold Desert Tortises, Chuckawallas and also scorpions to Dr. Sthanke at ASC.
Slope had a lot of ashmatic and tuberculosis folks.
But you could score some herion at a house at about 1300 East Dunlap. We had the PIX theatre at 300 west Olive (now Dunlap) It was closed due to religious pressure one day after it showed the movie, Blue Moon. In the late sixties the Texas Bandito motorcycle gang came to town.

There is a small cul-de-sac in Phoenix named after MLK. It is so small, apparently it doesn't show up on many maps. This is the original street named after MLK in Phoenix.

http://old.seattletimes.com/special/mlk/perspectives/roadways/arizona.html

I remember collecting mushrooms for a study Dr. Stanke was doing. He lived in my 'hood. Not as many chuckawallas or horny toads as their used to be within the city limits.

DR Stahnke, His scorpion collection was deposited in the California Academy of Sciences in San Francisco. I am not sure where his literature collection went.

Might the current large jewelry robbery's in France be the result of Frances involvement in fighting ISIS and such others?

A take off from the OAS attempt to bring down Charles de Gaulle.

@Emil: in partial (and tardy) response to issues raised in previous discussion – in no particular order:

Arizona, like all other states, is under a budgeting squeeze. Competing for money are two salient rivals. One is other social programs and the other is pension and other employee benefits.

Arizona’s 2015 (spending) budget, which totals $6.6 billion includes the following “big ticket’ items:

Health $6,605 Million
Administration $ 824
Corrections $ 639
Econ Security $2,354
Education $3,543
Health Svcs $1,813
Public Safety $ 311
Transportation $1,452
Child health/dev $ 86
Lottery Comm $ 138
School Facilities $ 332
Water $ 148
Univ. System $1,212

Cuts anywhere are going to be painful. I think the legislature thought the Univ. system was the least painful.

Without digging into the numbers, but there is no reason to suspect that Arizona is all that much different than other states, pension/retirement obligations are eating into budgets at a furious rate. In Illinois:

From: http://chicagoboyz.net/
The Chicago Public Schools (CPS) debt is now just one grade above “junk” status per this article.
In making the downgrade, Moody’s cited the school district’s reliance on reserve funds for “operating expenditures, particularly pension contributions, which will steadily increase in the coming years.”Moody’s also maintained its “negative outlook” on the district’s debt, again citing the rising pension costs. From 2013 to 2016, annual retirement costs will increase to $688 million from $197 million, Moody’s stated in its rating explanation.
Note that the budget that Rauner proposed for the state of Illinois had additional cuts for state and local government, at a time when each of them are crying to the state for relief…..

My believe is that more money or education ,weather K-12, CC or University will continue to be squeezed until Social Programs and Pensions are tamed. I do not believe that raising taxes is the answer – will expand this thought on demand.


Oops. Total Ax. budget should be $20.75 Billion.

Last time I checked Arizona received 37 percent of its general revenues from the feds; but of the revenues raised by the state itself nearly 2/3 come from sales taxes.

The only reason the state faces budgetary deficit problems again so soon is the billion dollars or so of tax cuts to business, a large portion of which allows expanded depreciation deductions, so that businesses can now claim tax deductions for depreciation going back 20 years. Absent those tax cuts (which are purely self-serving and gratuitous, the state would face a balanced budget (or better) instead of huge deficits and wouldn't be experiencing significant short term budget pressures.

Any analysis which fails to point this out is either uninformed or deliberately obscurantist.

More:
The problem of “mission creep”: Too often when a societal problem arises, or is perceived to arise, there will be a clamor for a solution. Too often, this .problem/solution issue is kicked to the schools.

An example: child nutrition. I don’t think even the most jaded of us could not be concerned with this. But this is not the school’s function. This function should be performed by an independent organization, with its own funding, staffing, etc.

Others would include: sex ed., Phys. Ed., day care for children with children, athletic programs, and driver’s ed. The list could go on and on. I’m not saying these things do not have some value – but they are distractions to what the schools should be doing.

Here is another tax cut gimmick bankrupting Arizona, allowing net operating losses (using cheesy accounting) to be carried forward from 20 years ago to reduce or eliminate current and future tax liabilities:

" For corporate income tax purposes, the NOL carryforward period is extended from five years to 20 years for taxable years beginning after 2011."

http://news.cchgroup.com/index.php/tax-headlines/state-tax-headlines/arizona-multiple-taxes-capital-gains-tax-cut-nol-carryover-increase-bonus-depreciation-more-enacted/

@Emil. Only took a cursory look at the revenue side of the budget. As you say, there is a substantial item for “intergovernmental transfers” (or something like that). Assumed this to be federal to state and probably related to Medicare/Medicaid and other inducements to toe the federal line.

I am not familiar enough with the “billion dollars in tax cuts” to opine on them. You mention “depreciation” as a tax cut. Depreciation has always been a tax deductible expense. Taxing authorities frequently allow accelerated depreciation. This is more a shifting of tax payments (in time) and an absolute cut. The cut in the states property tax is a sure enough a cut. I didn’t even know there was a state property tax on business properties. I asked my local convenience store owner if he paid a state property tax. I can’t give you his exact response – other than it involved a lot of profanity; we have one here too. Also a tax on “furniture” – the racks his stuff is displayed on.

Regarding the recent action - the state property tax rate cut and the cut in university spending: there is no clear answer to the question. Note the two actions are not directly linked; the state could have reduced the rate and cut something else. But for the sake of argument, let’s assume they are directly linked. This in essence comes down to the question: “Which is a better “investment” for the citizens of Arizona? This could be debated forever.

An anecdotal answer is the best I can provide. The state of California has certainly not shy about taxing the snot out of business (and everything else it can lay hands on) and spending of education (and everything else). How’s that turning out?
Ran into this today:

http://www.newgeography.com/content/004868-california-social-priorities-a-new-report

In fact, Cali now has the highest (adjusted for the cost of living) poverty rate in the union:

http://www.newgeography.com/content/004852-50-years-us-poverty-1960-2010

I hate to rely on anecdotes. They’re great for illustrating things; not proving them.

With regard to education (K12, CC, University) the big question is: “how are we doing?” Then: “is more money the answer?” My OPINION is “poorly” and “probably not”.

Wkg, the billion dollars in tax cuts by the state of Arizona come from two major pieces of legislation passed within the last few years but before D.D. became governor. For all
I know there may be more since then. The total for both was estimated at just under a billion dollars over the original time window used in calculation (which ends with the current decade. The figures were provided by the Republican controlled state budget committee and are likely to understate the revenue loss, particularly if they assume supply side growth in tax revenues as a result of the cuts (I don't know).

There is a fairly obvious direct link between the loss of state revenues from the tax cuts and the state's current deficit crisis, which in turn puts pressure for spending cuts on a legislature which refuses to reverse its cuts, much less to increase revenue additionally.

Yes, depreciation is fairly common but the tax cuts increased this by rather uncommon magnitudes.

If you will forgive me in saying so, you might find your reading comprehension skills improved if you take off the ideological blinders which result in your misreading or missing the point of so much, as well as your habit of substituting minor points for your opponents' major ones in your haste to construct an easily demolished and distracting straw man argument.

One can only hope that Democratic Party strategists read and take to heart this Forbes(!) article, instead of yet again running from the very thing that will save them, in their blind haste to distance themselves from everything Obama.

I also hope the FPE adds the link to the Best Of archive.


http://www.forbes.com/sites/adamhartung/2015/03/10/obamas-trifecta-democrats-continue-economically-trouncing-republicans/

Emil:

The AZ carryforward rule was changed to align with federal NOL's:

http://www.irs.gov/publications/p536/ar02.html#en_US_2013_publink1000177383

Re Arizona's billion dollars in tax cuts:

http://tucson.com/news/local/govt-and-politics/brewer-signs-package-to-slash-biz-taxes/article_f4531c48-a114-5126-87b2-296e70319796.html

Here's how you get the billion. First, take the "$538 million package of business tax reductions approved last session" referenced in the article. (These were also documented elsewhere.) Then skip to the end of the article and add together the annual revenue lost from the second package of tax cuts, and you'll get $978 million.

If you'd like to go back further than 2011, you'll find that Arizona could have $3.1 billion more in revenues, with no ill effects to the economy, had the state not repeatedly slashed taxes since the early 1990s. The following is from 2013:

"...revenues are $3.1 billion less this fiscal year due to tax policy changes that have been implemented since the early 1990s...

"...As taxes were reduced, Arizonans were told these tax cuts would boost the state's economy, and some even suggested the growth would be so robust that the tax cuts would pay for themselves. The study I just completed for the Grand Canyon Institute, "The Effects of Tax Reductions In Arizona: Significantly Reduced Government Revenue and No Apparent Impact on Economic Growth," shows that those claims were wrong.

"The study examined average annual growth over the last 40 years on several economic indicators, including measures of aggregate growth, prosperity and productivity. None of these measures show faster growth since the tax reductions began.

"...Instead of causing economic growth to accelerate, the analysis indicates that the tax reductions have followed cyclical upswings in the economy that have created temporary revenue surpluses that allowed the tax reductions to occur while initially balancing the budget."

http://tucson.com/news/opinion/guest-column-tax-reductions-have-cut-revenue-haven-t-helped/article_538487f7-5118-5c6a-bc9b-2d83e52911a0.html

See also here:

http://cqrcengage.com/ecec/app/document/5531998;jsessionid=d+wFLdUnR7ei+8PdpqR2k-G4.undefined

No idea why that posted twice. Please delete one.

This is the cycle of "Oppression" by "Economic Royalists".
How many more Joe Stacks will it take to bring the revolution?

INPHX wrote:

"The AZ carryforward rule was changed to align with federal NOL's."

If so, that doesn't change the fact of lost revenue.

However, it's unclear to me that the rules are the same. Under federal law you have to waive the carryback to get that carryforward. Also, in Arizona:

"The increase in the carry-forward period applies with respect to specified liability losses, REITs and excess interest losses."

http://www.msco-cpa.com/business.htm

REITs stands for Real Estate Investment Trusts. You know, those things that caused the economy to collapse, with particularly bad losses here in Arizona's real estate market.

Emil:

REITS did not cause the economy to collapse, here or in Arizona.

That's just silly.

Very few hold houses (but lots hold apartments)and even fewer hold residential mortgages.

They also tend to avoid debt.

WKG, now that we know what should not be taught in ALL Schools?
What should be taught?

let me toss in my "opinion" about classes from Kindergarten to grade 12.
Two most critical classes, ART and MUSIC.
From cal frolicking at Summer Hill back in the old days

From the Wall Street Journal: "Regulators Worry Mortgage REITs Pose Threat To Financial System"

http://www.wsj.com/articles/SB10001424127887324763404578431033270347040

I'm on mobile today and can't access the information I want regarding the role of REITs in the subprime mortgage collapse.

First of all, let’s see if I can pass a comprehension test.
- Over the last 25 years, tax rates have bet cut – mostly to individuals.
- The effect of the cuts is major. Somewhere in the neighborhood of $3 billion.
- Obviously, the cuts effect spending.
- Without any basis for says this: the cuts have been across the board.
- The quality of state supported/provided services are less then would have been had there been no cuts.
- The effect of the cuts on the economy, both pro and con, has been small. (I don’t entirely agree with this one, but I don’t disagree all that much either).


========================================================
An aside: I ran into this today: Per capital real incomes by metro:
http://www.demographia.com/db-pcapppp52.pdf
Ranks 52 metros, with populations greater than 1 million, by “real” per-capital incomes (i.e. adjusted for price parity).
Here’s the bottom of the barrel:
Phoenix, AZ $36,155 49
Orlando, FL $35,267 50
Las Vegas, NV $35,053 51
Riverside-San Bernardino, CA $28,472 52

I think it is apparent that three of four in the basement are noted for their tourism based economies. Riverside is a story all by itself.

Btw: Los Angles comes in at a whopping #48. The story of the widespread poverty in the Golden State needs more air time.

FYI: Birmingham at #22, just ahead of Dallas at #23 and well ahead of such stalwarts as Chicago (#28), Austin (#36), Portland (#39), Atlanta (#41) and San Diego (#43). RC would be gratified to see Seattle at #10.
===============================================================
The issue is frequently raised about the correlation between educational spending and an area’s (city’s) wealth. The inference being that education leads to wealth. I think and equally compelling case could be made that wealth leads to increased spending. Any number of correlations could be made; e.g. Health/educational outcomes, racial makeups, single moms, etc.

My contention: beyond funding education to some “adequate” level, additional funding has little to do outcomes. Other factors come into play.

I am very favorably disposed to funding of “infrastructure”. I would include K-12 education as infrastructure. I would also include streets and roads, water, sewage and public safety. However, I would, as closely as possible, align use of “infrastructure” to the taxing used to support it.

Cuts to higher ed.: this is an indirect tax increase; shifts from tax receipts to tuition.

I would focus on three general areas. 1. Reading/writing, 2) math/science and 3) history/geography/economics. I am torn about the “life sciences”. The line has to be drawn somewhere.
In my imaginary school system, the kids would receive three hours of intense instruction of the above. This would happen from 8-12 noon.

Afternoons would be optional.

Instruction in things like art, music, physical education, sports, home economics, etc. would be available. These would be taught by instructors under contract.

From birth kids should have music. Beethoven for math.
art for structural engineering.

@Cal: didn’t include art/music as “must haves” because I don’t think they can be taught. It’s a gift and most of us don’t have it. I have a good “eye” for art – but I can’t make it. In music I can hardly recognize something that’s really good – get glimmers now and then.

Comparable to athletics; you can’t coach a kid to be a good athlete. You can “coach up” a good athlete to make them into a great athlete – but that’s about it.

Certain talents seemed to be linked, like math and music; but I don’t think listening to music is going to make you better at math – particularly if that music happens to be…..well never mind.

That’s why I include music and art as optional and voluntary instruction; without any obligation that all kids “must have” it and measure up to some standard.

Some background on the role of REITs in the subprime mortgage collapse (from 2007).

Note in particular this quote: "As borrowers had difficulties repaying loans, the value of the loans declined and banks called for mortgage REITs to put up more money."

This tells you something about the chain of cause and effect:

Sub-prime and other mortgage borrowers unable to make payments -- > Highly leveraged REITs increasing liabilities to banks --> REITs default on their obligations to banks --> Banks' own liabilities are suddenly magnified as real estate assets lose value and REITs are unable to compensate --> financial defaults spread as numerous leveraged financial institutions are unable to meet their statutory and/or contractual obligations...

"A crisis in credit markets triggered by a collapse of the U.S. subprime mortgage market has shuttered several mortgage real estate investment trusts and threatened the sector, rekindling memories of a similar crisis 30 years ago.

"In the 1970s when mortgage REITs were new to investors, risky loans and too much leverage forced most of them out of business and tarnished the reputation of equity as well as mortgage REITs for more than a decade.

"Equity REITs own property while mortgage REITs lend money to property owners.

"That crisis, caused by a collapse in construction lending, led investors to wonder if the REIT structure was inherently flawed.

"In my opinion, the legal structure doesn't make a damn bit of difference," said Lawrence Longua, director of the New York University Real Estate Institute REIT Center, and an REIT industry veteran.

"Longua said that many of today's mortgage REITs were done in by overly aggressive lending practices that led to questionable loans, which were pooled and sold as bonds to investors in the capital markets.

"They couldn't do it unless they had someplace where these loans would end up," he said.

"Loose lending standards, rising interest rates in 2005 and 2006, and falling house prices have resulted in increasing numbers of less credit-worthy U.S. borrowers defaulting on their so-called subprime home mortgages in 2007.

"The REIT structure requires companies to pass along a minimum of 90 percent of what would have been taxable income in the form of dividends to shareholders. The minimum 30 years ago was 95 percent. In exchange, a company's income is not taxed.

"Without the ability to retain earnings, mortgage REITs have historically relied on borrowed money to fund their mortgages.

"Many of the modern mortgage REITs, and those of 30 years ago, borrowed money based on the value of the loans. As borrowers had difficulties repaying loans, the value of the loans declined and banks called for mortgage REITs to put up more money.

"...With no retained earnings, mortgage REITs such as New Century Financial Corp NEWCQ.PK, American Home Mortgage AHMIQ.PK, and the former REIT HomeBanc Corp HMBN.PK have come up empty-handed in the current subprime market and have filed for bankruptcy protection.

"They were so levered they couldn't come up with more collateral," BMO Capital Markets David Chiaverini said. "But even if they were regular corporations, the banks providing the facilities would have still shut them down."

http://www.reuters.com/article/2007/08/16/us-mortgagereits-idUSN1526504220070816

And something published later (2012) but still relevant:

"Levered mortgage-backed REITs are dangerous. Many of those who invest in the underlying REITs have little idea what is generating 10%+ yields, nor do they understand what scenarios could lead share prices to drop precipitously. These investors need to recall the lesson we all learned so vividly in 2008 – leverage may increase returns, but it does so by significantly magnifying risk.

"...REITs typically purchase 30-year agency mortgage pools (issued by Fannie Mae and Freddie Mac) and lever them up. The mechanism by which the REIT does this is taking a newly purchased agency mortgage-backed securities (MBS) pool; entering into a repurchase agreement (repo) with a dealer, where the dealer gives the REIT cash; then purchasing another agency MBS pool with the cash.

"REITs repeat this process until they have achieved six- to eight-times leverage.

"The REIT American Capital Agency (Ticker: AGNC), for instance, had a net interest spread of 2.14% in 3Q2011 and a spread of 1.60% in 2Q2012. Because those interest spreads are being levered six or eight times, the leveraged net interest spread ran between 12% and 18% on average.

"Ah, so that’s how these REITs were able to pay out such large dividends!

http://www.advisorperspectives.com/newsletters12/The_Dangers_of_Mortgage_REITs.php

Note also the sweet deal for Arizona real estate investors who are now able, thanks to tax cuts given by the state legislature a few years ago, to carry forward net operating losses for twenty years instead of five, with REITs specifically included (see comment and link above).

P.S. Note also that the Reuters material above was published in August, 2007, before the stuff REALLY hit the fan...

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